ALBERTSON'S INC.: Reaches Settlement For CA Managers' Wage Suit---------------------------------------------------------------Albertson's, Inc. reached an agreement for the consolidatedclass action filed against it in the Superior Court for theCounty of Los Angeles, California. The suit also named asdefendants several of the Company's wholly-owned subsidiaries,namely:

(1) American Stores Company,

(2) American Drug Stores, Inc.,

(3) Sav-on Drug Stores, Inc., and

(4) Lucky Stores, Inc.

The first suit filed against the Company is styled "Gardner, etal. v. Albertson's, Inc., et al." The Company's bonus-eligiblemanagers filed the suit, seeking recovery of additional bonuscompensation based upon plaintiffs' allegation that thecalculation of profits on which their bonuses were basedimproperly included expenses for workers' compensation costs,cash shortages, premises liability and "shrink" losses inviolation of California law.

In August 2001 a class action complaint with very similarclaims, also involving bonus-eligible managers, was filedagainst the Company as well as Lucky Stores, Inc. and AmericanStores Company, wholly-owned subsidiaries of the Company, in theSuperior Court for the County of Los Angeles, California, styled"Petersen, et al. v. Lucky Stores, Inc., et al."

In June 2002 the cases were consolidated and in August 2002 aclass action with respect to the consolidated case was certifiedby the court. On September 17, 2004, the Company and theplaintiffs entered into a definitive agreement to settle theconsolidated Gardner/Petersen case. The settlement agreementremains subject to the final approval of the court, which theCompany expects to receive in the fourth quarter of fiscal 2004.

ALBERTSON'S INC.: New Claims Process Ordered in Wage Suit Pact--------------------------------------------------------------The United States District Court in Boise, Idaho ordered asecond claims process in the settlement of the consolidatedclass action filed against Albertson's, Inc., over variousissues including "off-the-clock" work allegations andallegations regarding certain salaried grocery managers' exemptstatus.

Eight class and/or collective actions were initially filedagainst the Company. They were later consolidated. InSeptember 2000 an agreement was reached and court approvalgranted to settle the suits. Under the settlement agreement,current and former employees who met eligibility criteria havebeen allowed to present their off-the-clock work claims to asettlement administrator. Additionally, current and formergrocery managers employed in the State of California have beenallowed to present their exempt status claims to a settlementadministrator.

The Company mailed notices of the settlement and claims forms toapproximately 70,500 associates and former associates.Approximately 6,000 claim forms had been returned, of whichapproximately 5,000 were deemed by the settlement administratorto be incapable of valuation, presumed untimely, or both. Theclaims administrator was able to assign a value to approximately1,000 claims, which amount to a total of approximately $14,although the value of many of those claims is still subject tochallenge by the Company. During the quarter ended July 29,2004, there was a supplemental mailing and in-store postingdirected toward a narrow subset of current and formerassociates. The Company has been advised by the settlementadministrator that approximately 200 of these individualssubmitted the necessary claims documents. Distinct from thissupplemental claims process, a second claim process was orderedby the Court, but the Company is still waiting for finalinstructions from the Court.

The suit is styled "Montgomery v. Albertson's, Inc., case no.02-CV-496," filed in the U.S. District Court for the District ofIdaho (Southern), under Judge David O. Carter. Lawyers for theplaintiffs are:

Plaintiff filed this purported class action on December 5, 2002,alleging that the Company engaged in unfair and deceptivebusiness practices relating to its AppleCare Extended Serviceand Warranty Plan. Plaintiff asserts causes of action forviolation of the California Business and Professions CodeSections 17200 and 17500, breach of the Song-Beverly WarrantyAct, intentional misrepresentation and concealment. Plaintiffrequests unspecified damages and other relief.

The Company filed a demurrer and motion to strike which weregranted, in part, and Plaintiff filed an amended complaint. TheCompany filed an answer on April 17, 2003 denying allallegations and asserting numerous affirmative defenses.Plaintiff subsequently amended its complaint. On October 29,2003, the Company filed a motion to disqualify Plaintiff'scounsel in his role as counsel to the purported class and to thegeneral public. The Court granted the motion, but allowedPlaintiff to retain substitute counsel. Plaintiff did engagenew counsel for the general public, but not for the class. TheCompany moved to disqualify Plaintiff's new counsel and to havethe Court dismiss the general public claims for equitablerelief. The Court declined to disqualify Plaintiff's newcounsel or to dismiss the equitable claims, but did confirm thatthe class action claims are dismissed. The case is stayedpending an appeal.

Plaintiffs filed this purported class action on September 22,2003 against the Company and other members of the industry onbehalf of an alleged nationwide class of purchasers of certaincomputer hard drives. The case alleges violations of Civil CodeSection 17200 (unfair competition), the Consumer Legal RemediesAct ("CLRA") and false advertising related to the size of thedrives. Plaintiffs allege that calculation of hard drive sizeusing the decimal method misrepresents the actual size of thedrive. The complaint seeks unspecified damages and otherrelief.

Plaintiff filed an amended complaint on March 30, 2004 and theCompany filed an answer on September 23, 2004, denying allallegations and asserting numerous affirmative defenses. TheCompany is investigating this claim.

APPLE COMPUTER: Plaintiffs Appeal of CA Suit Dismissal Pending--------------------------------------------------------------Plaintiffs' appeal of the dismissal of the class actions filedagainst Apple Computer, Inc. and chief executive officer StevenP. Jobs is still pending. The securities class actions wereinitially filed in the United States District Court for theNorthern District of California and are styled:

These lawsuits are substantially identical, and purport to bringsuit on behalf of persons who purchased the Company's publiclytraded common stock between July 19, 2000, and September 28,2000. The complaints allege violations of the 1934 SecuritiesExchange Act and seek unspecified compensatory damages and otherrelief.

The Company filed a motion to dismiss on June 4, 2002, which washeard by the Court on September 13, 2002. On December 11, 2002,the Court granted the Company's motion to dismiss for failure tostate a cause of action, with leave to Plaintiffs to amend theircomplaint within thirty days. Plaintiffs filed their amendedcomplaint on January 31, 2003, and on March 17, 2003, theCompany filed a motion to dismiss the amended complaint. TheCourt heard the Company's motion on July 11, 2003 and dismissedPlaintiffs' claims with prejudice on August 12, 2003.Plaintiffs have appealed the ruling.

The lead case in this litigation is styled "Hawaii StructuralIron Workers Pension Trust Fund v. Apple Computer Inc., et al.,case no. 4:01-cv-03667, filed in the U.S. District CourtCalifornia Northern District (Oakland), under Judge Hon. ClaudiaWilken.

APPLE COMPUTER: Consumers File Consolidated iPod Lawsuit in CA--------------------------------------------------------------Apple Computer, Inc. faces a consolidated consumer class actionfiled in California Superior Court for the County of San Mateo,over alleged misrepresentations by the Company over the batterylife of its popular iPod mp3 player.

The suits include causes of action for violation of CaliforniaCivil Code Section 17200 (unfair competition), the ConsumerLegal Remedies Action ("CLRA") and claims for false advertising,fraudulent concealment and breach of warranty. The complaintsseek unspecified damages and other relief. The Company isinvestigating these claims. The cases have been consolidated inSan Mateo County and Plaintiffs have filed a consolidatedcomplaint.

In addition, a similar complaint relative to iPod battery life,Mosley v. Apple Computer, Inc.," was filed in WestchesterCounty, New York on June 23, 2004 alleging violations of NewYork General Business Law Sections 349 (unfair competition) and350 (false advertising). The Company removed the case toFederal Court and Plaintiff filed a motion for remand, which theCourt has not yet decided.

The Company was served on January 21, 2004, and filed an answeron February 20, 2004, denying all allegations and assertingnumerous affirmative defenses. The Company is investigatingthese allegations. The Company filed a motion to disqualifyPlaintiff's counsel, which the Court denied. The Company fileda petition for a writ of mandate with respect to this ruling andthe Court of Appeal has issued an order to show cause as to whythe writ should not issue. Plaintiffs lead counsel subsequentlywithdrew. The Company also has obtained an opinion on the taxissue from the State Board of Equalization.

AUSTRIA: Cable Car Victims' Relatives To Fight For Compensation---------------------------------------------------------------Relatives of 155 skiers and snowboarders killed in an alpinecable car fire in November 2000 will press on with civillawsuits seeking damages, despite a setback in a U.S. court,according to a lawyer representing the families, the AssociatedPress WorldStream reports.

As previously reported in the December 23, 2004 issue of theClass Action Reporter, the 2nd U.S. Circuit Court of Appeals inManhattan recently ruled that class action status and a singleliability trial are not appropriate for families of victims thecable car fire in Austria four years ago that killed 155 people.According to the federal appeals court, a lower court judge hadmade a mistake in analyzing how U.S. laws would permit such acase to proceed.

Martin J. D'Urso, a lawyer for eight plaintiffs named in thelawsuit, stated that the appeals court ruling cuts off an avenuethat more than 100 potential plaintiffs overseas were countingon and added that he did not know whether the ruling would beappealed. He also stated that the ruling could force families topress lawsuits separately in European courts, rather than as agroup in U.S. courts, a very costly proposition.

In the lawsuits, relatives of victims sought unspecifiedcompensatory and punitive damages against train and train partmanufacturers and operators. They alleged that the companieswere responsible for train and tunnel defects that caused thedeaths in Kaprun, Austria.

U.S. District Judge Shira A. Scheindlin had said in her lowercourt ruling that a class action was necessary in part becausefew plaintiffs could afford to bring such a complex lawsuitagainst foreign defendants. Judge Scheindlin said the costsavings for the plaintiffs were so great that the non-Americanswere willing to risk that a U.S. judgment of liability may notbe recognized in their own countries. The judge added that two-thirds of the victims' families had expressed interest injoining the class action, including more than 20 Germanfamilies, 56 Austrian families and all 10 Japanese families.

However, the appeals court said Judge Scheindlin's ruling was inerror. It said that she found a legal basis for her ruling in anearlier case, citing a sentence that would provide support "onlyif taken out of context."

The victims were headed for a day of fun on a glacier atop theKitzsteinhorn mountain near Kaprun, a popular ski resort 100kilometers (60 miles) south of Salzburg in the heart ofAustria's Alps, when the cable car bringing them to the summitcaught fire in a tunnel.

Most of those who perished in the November 11, 2000 alpine cablecar fire, which was Austria's deadliest peacetime disaster, werefrom Austria and Germany, while eight other victims wereAmericans, including a family of four and a newly engagedcouple. The rest came from Japan, Slovenia, the Netherlands andBritain. Only 12 people managed to escape the crowded car, partof what is known as a funicular train, which ascended themountain on a track while being pulled by a steel cable.

An investigation into the disaster indicated that a defectivespace heater in the car caused a heating element to come loose,causing hydraulic brake oil in nearby pipes to overheat, driponto the plastic-coated floor and set it alight.

In the ensuing trial for charges of criminal negligence, sixteenpeople, including cable car company officials, technicians andgovernment inspectors, were acquitted in February in a verdictthat relatives denounced as a miscarriage of justice. Accordingto the presiding judge in the case, there was insufficientevidence to find the defendants, who had all pleaded innocent,responsible for the conditions that caused the blaze.

Austrian prosecutors in September appealed eight of the 16acquittals, and lawyers for the victims' families have filedseparate civil proceedings in Germany and the United Statesseeking compensation.

The families hold the Austrian government partly responsible forallegedly having ordered the defective space heater to beinstalled in the cable car and having failed to ensure adequateventilation in the tunnel.

Even though their claims have been dismissed by the appealscourt, attorney Ed Fagan, one of the plaintiff's attorneys, toldthe Austria Press Agency that the ruling did not depriverelatives of other ways to seek compensation. According to him,Claims against Siemens AG, Siemens USA, Bosch Rexroth AG, BoschRexroth USA and Omniglow have been refiled in U.S. courts.Victim's Relatives allege the companies, along withGletscherbahnen Kaprun AG, which operated the cable car, werepartly responsible for the Nov. 11, 2000, inferno. At least 100lawsuits have been filed in Austria against GletscherbahnenKaprun AG, Mr. Fagan adds.

BEAZER HOMES: Settlement of IN Mold Suit Final, No Appeal Filed----------------------------------------------------------------The Hamilton County Superior Court in the State of Indiana'sapproval of the settlement of the mold class action filedagainst Beazer Homes Investment Corporation and Trinity HomesLLC, is deemed final after plaintiffs failed to appeal/opposethe approval.

As part of that case, the plaintiffs are asserting that theCompany and Trinity and Beazer Homes Investment Corp. violatedapplicable building codes. The complaint attempts to define thepurported class to include all owners of a residential structurein Indiana constructed and marketed by Trinity and Beazer HomesInvestment Corp. in which a one-inch gap with a vapor barrierdoes not exist between an exterior brick veneer wall and thesurface of the underlying exterior wall. Excluded from theclass are any residents who suffer personal injuries caused bymold infestation. No monetary amount was stated in the claim.

The parties in the putative class action engaged in a series ofmediation conferences, which resulted in an agreement for aproposed settlement of the case. The parties submittedsettlement documents to the court, which the Court preliminarilyapproved on August 6, 2004. A Fairness Hearing was held onOctober 18, 2004 and the Court approved the settlement agreementon October 20, 2004.

The settlement class is defined as the current owners of allTrinity homes that have brick veneer, where the closing ofTrinity's initial sale of the home took place between June 1,1998 and October 31, 2002. However, the class definitionspecifically excludes:

(1) any houses built by Homes by John McKenzie;

(2) any houses owned by Trinity as of August 6, 2004, or which as of August 6, 2004 were the subject of an executed agreement for Trinity to purchase the homes; and

(3) any houses for which a homeowner has executed or agreed to a release in favor of Trinity as part of a separate agreement.

The settlement agreement establishes an agreed protocol andprocess for assessment and remediation of any external waterintrusion issues at the homes which includes, among otherthings, that the homes will be repaired at Trinity's expense. Alicensed engineering firm working on behalf of the homeownerswill be allowed to review the plan for the remediation of eachhome as well as the performance of the repair work. Thesettlement establishes a time frame within which the work mustbe completed and provides a Dispute Resolution Panel to resolvedisputes between a homeowner and Trinity concerning both theplan to remediate the home and the performance of the work.

Under the settlement, each homeowner releases Trinity, BeazerHomes Investment Corp. and other affiliated companies from theclaims asserted in the class action lawsuit, claims arising outof external water intrusion, and claims of improper brickinstallation, including property damage claims, loss ordiminution of property value claims, and most personal injuryclaims, among others.

There was a 30-day timeframe, which ended on November 19, 2004,to appeal the Court's Order approving the settlement. No appealswere received by the Court within the timeframe established. TheCompany expects to send out the claims notices on or aboutDecember 20, 2004 and the Class Members will have 60 days tofile Claims.

The suit, filed by attorney Michael A. Josephson of the Houstonlaw firm Fibich, Hampton & Leebron on behalf of Deborah Hanksand Shirley Trahan of Orange, Texas, and Brian Narens ofTexarkana, Texas, alleges that furniture-department managers,furniture-sales managers and assistant-store managers, weredenied overtime pay even though they worked more than 40 hours aweek and spent more than 90 percent of their time performingsales, stocking, janitorial and other non-management work,according to an earlier Class Action Reporter story (November18,2004). The Columbus-based closeout retailer allegedly"created and implemented an unlawful payment scheme" to denymany of its 45,000 workers in 46 states overtime.

Formal discovery has not begun and the Company cannot make adetermination as to the probability of a loss contingencyresulting from this lawsuit or the estimated range of possibleloss, if any. The Company intends to vigorously defend itselfagainst the allegations levied in this lawsuit, the company saidin a disclosure to the Securities and Exchange Commission.

The suit is styled "Hanks et al v. Big Lots Stores, Inc., caseno. 5:04-cv-00238-DF-CMC," filed in the United States DistrictCourt for the Eastern District of Texas, Texarkana Division,under Judge David Folsom. Lawyers for the plaintiffs are:

BROWN SHOE: CO Court Refuses New Trial For Suit On Redfield Site----------------------------------------------------------------The Colorado State Court, District Court for the City and Countyof Denver refused to allow a new trial in the class action filedagainst Brown Shoe Co., Inc., related to the operations of itsRedfield, Colorado site.

The Company is remediating, under the oversight of Coloradoauthorities, the groundwater and indoor air at the Redfield siteand residential neighborhoods adjacent to and near the propertythat have been affected by solvents previously used at thefacility. Plaintiffs alleged claims for trespass, nuisance,strict liability, unjust enrichment, negligence and exemplarydamages arising from the alleged release of solventscontaminating the groundwater and indoor air in the areasadjacent to and near the site.

In December 2003, the jury hearing the claims returned a verdictfinding one of the Company's subsidiaries negligent and awardedthe class plaintiffs $1.0 million in damages. The Company hasrecorded this award along with pre-trial interest on the awardand estimated costs related to sanctions imposed by the courtrelated to a pre-trial discovery dispute between the parties.In April 2004, the plaintiffs filed a motion for a new trial;the court has denied that motion. The plaintiffs have appealedthe judgment to the Colorado Court of Appeals and have asked fora retrial. The Company has cross-appealed the trial court'sruling as to the amount of pre-judgment interest, and hasconditionally appealed a number of the trial court's rulings inthe event of a retrial.

CLAUDE LEFEBVRE: Found Guilty Of Wire Fraud, Money Laundering-------------------------------------------------------------The Securities and Exchange Commission recently revealed thatClaude Lefebvre was found guilty of wire fraud and engaging inillegal monetary transactions for his role in a scheme thatmisappropriated several million dollars from investors. Thecriminal charges against Lefebvre arose out of the samefraudulent scheme for which the Commission instituted asecurities fraud action against Lefebvre and others in 2002.

The U.S. Attorney's Office for the District of Colorado indictedLefebvre and Dennis Herula - who the Commission also named inthe related securities fraud action filed against Lefebvre in2002 - in a Second Superseding Indictment dated Aug. 25, 2004.The Indictment alleged that Lefebvre and Herula devised a schemeto defraud investors and obtain money and property from thoseinvestors by means of materially false and fraudulent pretenses,representations and promises. The Indictment also alleged thatLefebvre and Herula misappropriated several million dollars ofthose investor funds. For his role in the scheme, Herula pledguilty and his guilty plea was accepted by U.S. District CourtJudge Robert Blackburn on Oct. 26, 2004. Herula is scheduled tobe sentenced on Feb. 11, 2005. After a bench trial, JudgeBlackburn found Lefebvre guilty on all 15 counts of theIndictment. Lefebvre is scheduled to be sentenced on Feb. 25,2005.

On July 31, 2002, the Commission filed a civil injunctive actionagainst Lefebvre, Herula and others, alleging that theyparticipated in a fraudulent offering of securities that raisedat least $40 million from investors in July 2002. The Commissionalleged that Lefebvre falsely promised investors exorbitantreturns, such as 100% per week, through a fraudulent prime bank-type trading program. The Commission further alleged that in thespan of several weeks after obtaining the $40 million, Lefebvre,Herula and others spent at least $4 million of investor funds onpersonal and luxury items such as cars, jewelry and large hotelbills. On April 12, 2004, a San Francisco federal court entereda default judgment against Lefebvre, permanently enjoiningLefebvre from future violations of the antifraud provisions ofthe federal securities laws and ordering him to payapproximately $6 million in disgorgement, prejudgment interestand a civil penalty.

EDWARD JONES: Pays S75M To Settles SEC Revenue Sharing Charges--------------------------------------------------------------The Securities and Exchange Commission issued an OrderInstituting Administrative Proceedings, Making Findings andImposing Remedial Sanctions against Edward D. Jones & Co., L.P.,a brokerage firm headquartered in St. Louis, Missouri, allegingthat it failed to adequately disclose millions of dollars inincentives, commonly known as revenue sharing payments, that itreceived from a select group of mutual fund companies. TheCommission's action is being brought contemporaneously withactions by the NASD and the New York Stock Exchange who todayalso initiated settled disciplinary proceedings against EdwardJones based on similar allegations relating to the firm'sundisclosed receipt of revenue sharing payments. As part of thesettlement, Edward Jones will pay $75 million in disgorgementand civil penalties, all of which will be placed in a Fair Fundfor distribution to certain Edward Jones customers.

According to the Commission's Order, Edward Jones, one of thenation's largest sellers of brokerage-sold mutual funds, enteredinto revenue sharing arrangements with seven mutual fundfamilies. These seven mutual fund families paid Edward Jonesbetween $44 million and $68 million per year since at least 1999and Edward Jones designated them as Edward Jones' "PreferredMutual Fund Families." Edward Jones told the public and itsclients that it was promoting the sale of the PreferredFamilies' mutual funds because of the funds' long-terminvestment objective and performance. At the same time, however,Edward Jones failed to disclose that it received tens ofmillions of dollars from the Preferred Families each year, ontop of commissions and other fees, for selling their mutualfunds. Edward Jones also failed to disclose that such paymentswere a material factor, among others, in becoming and remainingan Edward Jones Preferred Mutual Fund Family. Edward Jonesprovided the Preferred Families with, among other things,exclusive access to Edward Jones' investment representatives andcustomer base. Edward Jones also exclusively promoted the 529college savings plans offered by its Preferred Families over allother 529 plans that that it had available to sell. Over 95% ofEdward Jones' sales of mutual fund shares during the five yearshave been sales of the seven Preferred Families.

The Commission simultaneously accepted an offer of settlementfrom Edward Jones in which it consents, without admitting ordenying the Commission's findings, to an Order that it shallcease and desist from committing or causing any violations andany future violations of Section 17(a)(2) of the Securities Actof 1933, Section 15B(c)(1) of the Securities Exchange of 1934and Rule 10b-10 under the Exchange Act and Municipal SecuritiesRulemaking Board Rule G-15. The Order also censures Edward Jonesand requires Edward Jones to pay $75 million in disgorgement andcivil penalties. The $75 million will be placed in adistribution fund for the benefit of certain customers of thefirm. The Order further requires Edward Jones to comply withcertain undertakings, including:

(1) providing heightened disclosures to customers on its website and in written form; and

(2) retaining an Independent Consultant to conduct a review of Edward Jones' policies and procedures.

ELECTRONICS BOUTIQUE: Reaches Settlement For CA Overtime Lawsuit----------------------------------------------------------------Electronics Boutique of America, Inc. reached a tentativeagreement to settle the class action filed against it inCalifornia Superior Court in Los Angeles County, styled"Chalmers v. Electronics Boutique of America Inc." The suitalleged that the Company's subsidiary improperly classifiedstore management employees as exempt from the overtimeprovisions of California wage-and-hour laws and sought recoveryof wages for overtime hours worked and related relief.

The Company denied liability but agreed to participate in non-binding mediation to attempt to resolve the matter. Thesettlement, in the amount of $950,000 which includes payments tobe made to proposed class members, as well as the attorneys'fees and litigation costs of the plaintiff, is still subject tofinal court approval. The Court has heard arguments for theapproval of the settlement this month, but has yet to release adecision.

FISCHER IMAGING: SEC Lodges Lawsuit V. Ex-Chairman Of The Board---------------------------------------------------------------The Securities and Exchange Commission recently filed a subpoenaenforcement action in the U.S. District Court for the Districtof Colorado against Morgan Nields, the former CEO and chairmanof the board of directors of Fischer Imaging Corporation(Fischer). Pursuant to a subpoena issued on Oct. 15, 2004,Nields was required to appear for testimony before theCommission on December 17. On December 16, Nields, throughcounsel, objected to the Commission's subpoena and notified thestaff that he would not appear to testify. On December 17,Nields failed to appear to testify as required by the subpoena.Accordingly, the Commission filed its Application For Order toShow Cause and For Order to Enforce Administrative Subpoena,along with a supporting Memorandum and Declaration.

In its Application and supporting filings, the Commissionalleges that on April 29, 2003, the Commission issued its OrderDirecting Private Investigation and Designating Officers to TakeTestimony (Formal Order) in the Fischer investigation. TheFormal Order authorizes members of the SEC staff to investigatewhether antifraud and/or reporting provisions of the federalsecurities laws have been or are being violated by any personsor entities in connection with the offer, sale and/or purchaseof securities in Fischer. Pursuant to its Application, theCommission is seeking an order directing Nields to show causewhy the Court should not enter an order requiring him to appearfor testimony. A hearing on the Commission's application has notyet been scheduled. The action is titled, SEC v. Morgan Nields,Civil Action No. 04-D-2628 (MJW), USDC, District of Colorado(LR-19012).

H&R BLOCK: Working To Settle Suits V. Refund Anticipation Loans---------------------------------------------------------------H&R Block, Inc. is working to settle lawsuits filed against itregarding its refund anticipation loan programs (RAL), assertingseveral legal theories, including allegations that, among otherthings, disclosures in the RAL applications were inadequate,misleading and untimely, the RAL interest rates were usuriousand unconscionable, the Company did not disclose that we wouldreceive part of the finance charges paid by the customer forsuch loans.

Under that settlement, the Company and the lending bank agreedto each pay $12.5 million toward a $25.0 million settlement fundfor the benefit of the class members. The settlement wasapproved by the District Court in February 2001. Certain classmembers who had objected to the settlement appealed the orderapproving the settlement to the Seventh Circuit Court ofAppeals.

In April 2002, the Court of Appeals reversed the DistrictCourt's order approving the settlement and remanded the matterback to the District Court for further consideration of thefairness and adequacy of the proposed settlement by a newDistrict Court judge. In April 2003, the District Court judgedeclined to approve the $25.0 million settlement, finding thatcounsel for the settlement plaintiffs had been inadequaterepresentatives of the plaintiff class and failed to sustaintheir burden of showing that the settlement was fair. The judgesubsequently appointed new counsel for the plaintiffs who filedan amended complaint and a motion for partial summary judgment.In March 2004, the court either dismissed or decertified all ofthe plaintiffs' claims other than part of one count allegingviolations of the racketeering and conspiracy provision of theRacketeer Influenced and Corrupt Organizations act. The case iscurrently scheduled to go to trial in March 2005.

On September 8, 2004, the Company's Board of Directors approveda proposed settlement of the case "Joyce Green, et al. v. H&RBlock, Inc., Block Financial Corporation, et al., Case No.97195023," in the Circuit Court for Baltimore City, Maryland.The proposed settlement provided for each class member toreceive a small cash payment and a one-time rebate coupon fortax return preparation services and for the defendants to paysettlement administration costs and court-approved legal fees ofclass counsel. During the process of finalizing the settlementagreement, the parties were unable to reach agreement regardingcertain settlement terms.

Another suit, styled "Deandra D. Cummins, et al. V. H&R Block,Inc., et al., Case No. 03-C-134," is pending in the CircuitCourt of Kanawha County, West Virginia. A class certificationhearing commenced in October 2004 and was continued untilDecember 22, 2004. A decision on class certification isexpected in early 2005, and the case is scheduled to go to trialin October 2005.

The suit was filed on January 18, 2002, as to which the Courtgranted plaintiffs' first amended motion for class certificationon August 27, 2003. Plaintiffs' claims consist of five countsrelating to the defendants' Peace of Mind program under whichthe applicable tax return preparation subsidiary assumesliability for the cost of additional tax assessmentsattributable to tax return preparation error.

The plaintiffs allege that defendants' sale of its Peace of Mindguarantee constitutes statutory fraud by selling insurancewithout a license, an unfair trade practice, by omission and by"cramming" (i.e., charging customers for the guarantee eventhough they did not request it and/or did not want it), andconstitutes a breach of fiduciary duty.

In August 2003, the court certified the following plaintiffclasses:

(1) all persons who were charged a separate fee for Peace of Mind by "H& Block" or a defendant H&R Block class member from January 1, 1997 to final judgment;

(2) all persons who reside in certain class states and who were charged a separate fee for Peace of Mind by "H&R Block," or a defendant H&R Block class member, and that was not licensed to sell insurance, from January 1, 1997 to final judgment; and

(3) all persons who had an unsolicited charge for Peace of Mind posted to their bills by "H&R Block" or a defendant H&R Block class member from January 1, 1997, to final judgment.

Among those excluded from the plaintiff classes are all personswho received the Peace of Mind guarantee through an H&R BlockPremium office and all persons who reside in Texas and Alabama.The court also certified a defendant class consisting of anyentity with the names "H&R Block" or "HRB" in its name, orotherwise affiliated or associated with H&R Block Tax Services,Inc., and which sold or sells the Peace of Mind product. Thetrial court subsequently denied the defendants' motion askingthe trial court to certify the class certification issues forinterlocutory appeal.

There is one other putative class action pending against theCompany in Texas that involves the Peace of Mind guarantee. Thiscase is being tried before the same judge that presided over theTexas RAL Settlement and involves the same plaintiffs attorneysthat are involved in the Marshall litigation in Illinois andsubstantially similar allegations. No class has been certifiedin this case.

HIX INSURANCE: Faces NC Suit For Forcing Motor Club On Consumers----------------------------------------------------------------Hix Insurance Center has tricked thousands of North Carolinacustomers into unknowingly buying motor-club memberships, whichgenerated bonuses for management and staff, according to aclass-action lawsuit that was recently filed in GuilfordSuperior Court, the Associated Pres reports.

The suit is specifically accusing the insurance agency ofimplementing a policy to sell customers especially Hispanicswithout their knowledge a club policy with automobile liabilityand worker's-compensation coverage.

According to Michael Williams, one of the Greensboro lawyers whofiled the lawsuit last month, "It's a cash cow." He also told APthat the N.C. Department of Insurance recently started acriminal investigation of Hix, which has headquarters in Greer,S.C., as Poinsett Insurance Agency. Hix has offices inGreensboro, High Point, Burlington, Charlotte and Raleigh.

Though declining to elaborate, Chrissy Pearson, a spokeswomanfor the insurance department, said that the department began itsinvestigation after receiving a complaint that Hix sold a motor-club membership without the customer's knowledge.

Greensboro attorneys Joseph and Michael Williams filed thelawsuit on behalf of Guilford residents Janiece Perry, MaritzaA. Hernandez and Saul Garcia Marquez. The attorneys asked thecourt to expand the lawsuit into a class action so that all Hixcustomers in the state would be considered plaintiffs. The clubmemberships in question ranged in price from $50 to $800, withno apparent reason for the price difference, Michael Williamssaid.

According to the lawsuit, Hix charged Ms. Perry $194 in May 2003for her motor-club membership, which she thought was the bulk ofher down payment for her liability-insurance policy. On theother hand, Ms. Hernandez and Mr. Marquez paid $500 for theirmemberships in July 2003, which they unknowingly bought whenbuying a worker's-compensation policy for their roofingbusiness, according to the lawsuit.

A memo obtained by the Mr. Williams' law firm and believed to bewritten by Pauline McCoy, the regional director of the Hixoffices in the Triad and a defendant in the lawsuit, to the Hixstaff said that the club "has to be sold to everyone byeveryone" and directs employees to "not discuss the motor clubwith the customers." Some employees had a problem with thepractices, according to Michael Williams at least five quit, andsome employees were concerned that Hix was targeting Hispanicimmigrants for the memberships.

The lawsuit also accuses the Company of falsifying customersignatures on the motor-club applications. Joseph Williams, aformer prosecutor and district judge told AP, "They're preyingon the people of North Carolina." "We're going to put a stop toit," he adds.

ILLINOIS: Business Groups Says Suits Declining in Madison County----------------------------------------------------------------The number of asbestos and class action lawsuits filed inMadison County declined significantly in 2004, the BellevilleNews-Democrat reports. So few were the cases filed this yearthat the number of asbestos filings stood at 464, down from 953lawsuits in 2003, while the number of class actions filed stoodat 71, down from 106 last year.

Ed Murnane, president of the Illinois Civil Justice League, abusiness group, thinks that the recent decline, because of thespotlight that has been shining on the county. Mr. Murnane alsotold the Belleville News-Democrat, "It would not be surprisingthat some of the lawyers have decided to pull back, to hold off,maybe even look for other venues."

However, according to Doug Wojcieszak, spokesman forEdwardsville-based Victims and Families United, a group backedby plaintiff attorneys, it's too early to speculate on thereason for the case decline. He even adds taht it's notsurprising Mr. Murnane's group and similar groups are takingcredit. "That's what he's got to say to make his funders feelhappy," Mr. Wojcieszak told the Belleville News-Democrat.

In the past, plaintiffs from across the country have sued inMadison County for exposure to asbestos, even though they andthe defendants often have little or no connection to the county.Plaintiff attorneys say that's because Madison County handlessuch cases quickly, and time is important because people whodevelop asbestos-related cancer generally have about a year tolive. Critics say plaintiff attorneys like the Madison Countycourt system because it's plaintiff-friendly.

Courthouse insiders say plaintiff attorneys in asbestos casesare concerned that it will become more difficult to keep anasbestos case in Madison County. Circuit Judge Dan Stack, whorecently took over asbestos cases after Circuit Judge NicholasByron left the asbestos docket, has ruled in some cases thatout-of-state plaintiffs can't keep their cases here.

Proponents of so-called tort reform have been hammering MadisonCounty for its volume of lawsuits and big awards. One suchgroup, the American Tort Reform Association, has even labeledthe county the No. 1 "judicial hellhole" in the country for thepast two years.

The biggest verdict in an asbestos case in the county was $250million, although the plaintiff later settled for less to avoidappeals, and the biggest class-action verdict was $10.1 billionagainst cigarette maker Philip Morris.

The critics stepped up their campaigns this past year, whenGordon Maag, a Democrat from Madison County, ran for a 5thDistrict seat on the Illinois Supreme Court against LloydKarmeier, the eventual winner and a Republican from WashingtonCounty.

According to Mr. Murnane, people have taken notice of whathappened in the election. "Clearly, the wishes of the voters inMadison County and throughout the 5th District have beenexpressed pretty forcefully, and we hope that the plaintifflawyers got the message," he said.

However Mr. Wojcieszak countered his comments by saying that "IfEd Murnane and his funders really want to lower the number ofclass-action lawsuits, they can work on cleaning up corporatecorruption and corporate fraud in this country, instead ofspending all this money on public-relations efforts in MadisonCounty and the metro-east."

(4) individuals serving on the Board of Directors of Fontana Union Water Company

The plaintiffs allege that they are the owners of 175 shares ofthe stock of Fontana Union Water Company, a mutual watercompany, and that the defendants conspired and committed actsthat constitute an unlawful restraint of trade, a breach offiduciary duty by the controlling shareholders of Fontana Unionand fraudulent business practices in violation of Californialaw. Among other things, plaintiffs have requested $25,000,000in damages and the trebling of such damages under Californialaw. In October 2003, the Court ruled that the lawsuit couldproceed as a class action lawsuit.

The lawsuits were filed by plaintiffs who are current or formerstore managers or assistant managers on behalf of themselves andother similarly situated California store managers and assistantstore managers. The lawsuits alleged that the Companyimproperly classified such employees as exempt underCalifornia's wage and hour and unfair business practice laws andsought damages, penalties, restitution, reclassification andattorneys' fees and costs.

After an initial exchange of information and investigation, theparties agreed to pursue alternative dispute resolution. Thecases were mediated before a neutral third party in June 2004.As a result of the mediation, the parties reached a settlementagreement whereby the Company would pay $11 million to settleall claims and causes of action of the plaintiffs.

MAXXON INC.: OK Jury Finds Firm, President Guilty Of Stock Fraud----------------------------------------------------------------A federal jury in Tulsa, Oklahoma found Maxxon, Inc., a Tulsa-based company, and its president, Gifford M. Mabie, Jr.,violated fraud provisions of the federal securities laws bymaking false or misleading statements in various media about thecompany and a "safety syringe" it was attempting to develop.The jury reached its verdict after a two-week trial in theUnited States District Court for the Northern District ofOklahoma. The jury declined to find defendant Dr. Thomas R.Coughlin, Jr., Maxxon's Medical Advisor, liable for securitieslaw violations.

The jury found that Mabie and Maxxon violated Section 10(b) ofthe Securities and Exchange Act of 1934 and Exchange Act Rule10b-5 beginning on Oct. 7, 1998, by knowingly or recklesslymaking false or misleading statements or omissions of materialfact. The jury also found that Mabie and Maxxon violatedSections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 in2002 by negligently making false or misleading statements infilings with the Commission.

Rhonda R. Vincent, Maxxon's Financial Reporting Manager, reacheda separate settlement with the Commission before the trial.Without admitting or denying the allegations of the Complaint,Vincent consented to the entry of a final judgment thatpermanently restrains and enjoins her from violating Section17(a)(2) and (3) of the Securities Act and from aiding andabetting any violation of Section 13(a) of the ExchangeAct. Vincent also agreed to pay disgorgement plus prejudgmentinterest totaling $33,267.18, and a civil penalty of $25,000.Chief Judge Sven Eric Holmes entered a final judgment regardingVincent's settlement on Dec 7, 2004.

A hearing on the remedies to be imposed against Maxxon and Mabiehas not yet been scheduled. The action is titled, SEC v. Maxxonet al., Civil Action No. 02-CV-975 H(J), U.S.D.C., N.D. Okla.(LR-19013).

MCDATA CORPORATION: Asks NY Court To OK Stock Lawsuit Settlement----------------------------------------------------------------McDATA Corporation asked the United States District Court forthe Southern District of New York to grant preliminary approvalto the settlement of the consolidated securities class actionfiled against it,

(1) John F. McDonnell, the former Chairman of the board of directors,

(2) Dee J. Perry, a former officer,

(3) Thomas O. McGimpsey, a current officer

(4) Credit Suisse First Boston (CSFB),

(5) Merrill Lynch Pierce Fenner & Smith, Inc.,

(6) Bear, Stearns & Co., Inc. and

(7) FleetBoston Robertson Stephens et al.

Several suits were initially filed, which were substantiallyidentical to numerous other complaints filed against othercompanies that went public in 1999 and 2000. These lawsuitsgenerally allege, among other things, that the registrationstatements and prospectus filed with the SEC by such companieswere materially false and misleading because they failed todisclose that certain underwriters had allegedly solicited andreceived excessive and undisclosed commissions from certaininvestors in exchange for which the underwriters allocated tothose investors material portions of shares in connection withthe initial public offerings, or IPOs, and that certain of theunderwriters had allegedly entered into agreements withcustomers whereby the underwriters agreed to allocate IPO sharesin exchange for which the customers agreed to purchaseadditional Company shares in the aftermarket at pre-determinedprices.

The complaints allege claims against the Company, the namedindividuals, and CSFB, the lead underwriter of the Company'sAugust 9, 2000 initial public offering, under Sections 11 and 15of the Securities Act of 1933. The complaints also allegeclaims solely against CSFB and the other underwriter defendantsunder Section 12(a)(2) of the Securities Act of 1933, and claimsagainst the individual defendants under Section 10(b) of theSecurities Exchange Act of 1934.

In September 2002, plaintiffs' counsel in the above-mentionedlawsuits offered to individual defendants of many of the publiccompanies being sued, including the Company, the opportunity toenter into a Reservation of Rights and Tolling Agreement thatwould dismiss without prejudice and without costs all claimsagainst such persons if the company itself had entity coverageinsurance. This agreement was signed by Mr. McDonnell, theformer Company Chairman, Mrs. Perry, the former chief financialofficer, and Mr. McGimpsey, the current Vice President ofBusiness Development and General Counsel and the plaintiffs'executive committee. Under the Reservation of Rights andTolling Agreement, the plaintiffs dismissed the claims againstsuch individuals.

On February 19, 2003, the court in the above-mentioned lawsuitsentered a ruling on the pending motions to dismiss, whichdismissed some, but not all, of the plaintiffs' claims againstthe Company. These lawsuits have been consolidated as part of InRe Initial Public Offering Securities Litigation (SDNY). TheCompany has considered and agreed to enter into a proposedsettlement offer with representatives of the plaintiffs in theconsolidated proceeding, and we believe that any liability onbehalf of the Company that may accrue under that settlementoffer would be covered by the Company's insurance policies.Until that settlement is fully effective, management intends tovigorously defend against the consolidated proceeding.

The suit is styled "In Re McDATA Corporation Initial PublicOffering Securities Litigation," related to "IN re IPOAllocation Securities Litigation," filed in the United StatesDistrict Court for the Southern District of New York, underJudge Shira N. Scheindlin. The plaintiff firms in thislitigation are:

MICROSOFT CORPORATION: SRC Sees Apathy As Reason For Few Claims---------------------------------------------------------------Millions of laid-back California consumers and companies areapparently content to let a $1 billion opportunity pass them by.With only two weeks remaining until the January 8 deadline,fewer than one million claims have been filed, out of somefourteen million eligible, for a share of the $1.1 billion fundarising out of the Microsoft class action settlement inCalifornia.

What's to explain the paltry rate of participation -- around 7percent -- in one of the largest recoveries ever achieved underCalifornia antitrust laws? Why are the vast majority of eligibleCalifornians ignoring a potential windfall that is supposed tobe distributed to businesses and consumers who bought Microsoftsoftware from 1995 through 2001?

Microsoft contends that it's because the software giant is sopopular with consumers. According to the settlement, two-thirdsof the unclaimed proceeds will go to public schools around thestate in the form of Microsoft software and vouchers. Microsoftwill get to keep the remainder, which could amount to a reducedCalifornia payout of hundreds of millions of dollars.

Howard Yellen, founder and CEO of Settlement Recovery Center,thinks there's a more likely explanation for the lacklusterconsumer response. "The Microsoft settlement is great, but it'snot well understood. For one thing, companies don't realizewhat's at stake," he says. Based in San Francisco, SettlementRecovery Center is helping businesses file claims in theMicrosoft settlement.

Individuals can claim up to five eligible software purchaseswithout providing any proof of purchase. Companies, which areprojected to receive around 80-percent of the settlement funds,must submit software licensing forms and other documentation toget their refunds.

A sizable recovery may be worth the effort, particularly forcompanies that upgraded their employees' Windows and Officesoftware between 1995 and 2001. "We have quite a few corporateclients who will recover over a million dollars each," Yellennoted.

The deadline for filing claims is January 8, 2005. Yellen isurging people not to wait. "Everyone should take advantage ofthis opportunity to recover what they are entitled to fromMicrosoft."

NIKU CORPORATION: Asks NY Court To Approve Stock Suit Settlement----------------------------------------------------------------Niku Corporation asked the United States District Court for theSouthern District of New York to grant preliminary approval tothe settlement of the consolidated securities class action filedagainst it, certain of its officers and directors and themanaging underwriters of the Company's initial public offering:

(1) Goldman, Sachs and Co.,

(2) Dain Rauscher Wessels,

(3) U.S. Bancorp Piper Jaffray and

(4) Thomas Weisel Partners

The consolidated suit arose out of the Company's IPO in February2000. The suit alleged, among other things, that theregistration statement and prospectus filed with the Securitiesand Exchange Commission for purposes of the IPO were false andmisleading because they failed to disclose that the managingunderwriters allegedly solicited and received commissions fromcertain investors in exchange for allocating to them shares ofCompany stock in connection with the IPO and entered intoagreements with their customers to allocate such stock to thosecustomers in exchange for the customers agreeing to purchaseadditional shares of the Company in the aftermarket at pre-determined prices.

On August 8, 2001 the Court ordered that these actions, alongwith hundreds of IPO allocation cases against other issuers,underwriters and directors and officers, be transferred to onejudge for coordinated pre-trial proceedings. In July 2002,omnibus motions to dismiss the complaints based on common legalissues were filed on behalf of all issuers, underwriters anddirectors and officers. By order dated October 8, 2002, theCourt dismissed the Company's officers and directors from thecase without prejudice.

In an opinion issued on February 19, 2003, the Court granted inpart and denied in part the motions to dismiss. The complaintsagainst the Company and the other issuers and underwriters werenot dismissed as a matter of law. The plaintiffs and the issuerdefendants (along with the individual officer and directordefendants of such issuers) have agreed to settle the cases. InJune 2004, final settlement papers were executed, submitted tothe Court, and the parties are awaiting approval by the Court.

The suit is styled "In Re Niku Corp. Initial Public OfferingSecurities Litigation, 01 Civ. 7280 (Sas)," related to "IN reIPO Allocation Securities Litigation," filed in the UnitedStates District Court for the Southern District of New York,under Judge Shira N. Scheindlin. The plaintiff firms in thislitigation are:

NORDSTROM INC.: Final Fairness Hearing Set January 2005 in CA-------------------------------------------------------------Final fairness hearing for the settlement of cosmetics antitrustclass action filed against Nordstrom, Inc. and other departmentstore and specialty retailers is set for January 11,2005 in theUnited States District Court for the Northern District ofCalifornia.

The Company was originally named as a defendant along with otherdepartment store and specialty retailers in nine separate butvirtually identical class action lawsuits filed in variousSuperior Courts of the State of California in May, June and July1998 that were consolidated in Marin County Superior Court. InMay 2000, plaintiffs filed an amended complaint naming a numberof manufacturers of cosmetics and fragrances and two otherretailers as additional defendants.

Plaintiffs' amended complaint alleges that the retail price ofthe "prestige" or "Department Store" cosmetics sold indepartment and specialty stores was collusively controlled bythe retailer and manufacturer defendants in violation of theCartwright Act and the California Unfair Competition Act.Plaintiffs seek treble damages and restitution in an unspecifiedamount, attorneys' fees and prejudgment interest, on behalf of aclass of all California residents who purchased cosmetics andfragrances for personal use from any of the defendants duringthe four years prior to the filing of the amended complaint.Defendants, including the Company, have answered the amendedcomplaint denying the allegations. The defendants haveproduced documents and responded to plaintiffs' other discoveryrequests, including providing witnesses for depositions.

The Company entered into a settlement agreement with theplaintiffs and the other defendants on July 13, 2003. Infurtherance of the settlement agreement, the case was re-filedin the United States District Court for the Northern District ofCalifornia on behalf of a class of all persons who currentlyreside in the United States and who purchased "Department Store"cosmetics from the defendants during the period May 29, 1994through July 16, 2003. The Court has given preliminary approvalto the settlement. A summary notice of class certification andthe terms of the settlement have been disseminated to classmembers.

If approved by the Court, the settlement will result in theplaintiffs' claims and the claims of all class members beingdismissed, with prejudice, in their entirety. In connectionwith the settlement agreement, the defendants will provide classmembers with certain free products and pay the plaintiffs'attorneys' fees, awarded by the Court up to $24 million.

PAUL DEGENHART: SEC Commences Lawsuit in SC Over Ponzi Scheme-------------------------------------------------------------The Securities and Exchange Commission filed a complaint in theU.S. District Court for the District of South Carolina againstdefendants Paul V. Degenhart (Degenhart), University Club Group,Inc. (UC Group) and UC Properties, LLC (UC Properties). Mr.Degenhart, who resides in Columbia, South Carolina, is an ownerand the controlling person of UC Group and UC Properties. UCGroup is a Delaware corporation with its principal place ofbusiness in Columbia, South Carolina. UC Properties is a SouthCarolina limited liability company with its office in Columbia,South Carolina.

The Complaint alleges that from November 1998 through May 2002,the defendants operated a Ponzi scheme through a series oftwenty-one securities offerings they made with the assistance ofSouthern Financial Group, Inc., a former South Carolina broker-dealer which served as underwriter for these offerings. The facevalue of these offerings totaled approximately $100 million, butbecause many of the investments were rolled-over, the actualamount raised was approximately $29.8 million. The complaintalleges that the defendants knew, or were severely reckless innot knowing, but failed to disclose to investors, that the noteofferings operated as a Ponzi scheme, because funds from newinvestors were required to pay the returns promised to earlierinvestors. The complaint further alleges that the defendantsknew, or were severely reckless in not knowing, that theinformation presented to investors in connection with theseofferings failed to disclose that the collateral wasinsufficient to secure the payment of the notes, and that theoffering materials presented to investors falsely represented,among other things, the interest rates and amounts of UC Groupand UC Properties outstanding obligations.

The complaint charges the defendants with violations of Sections17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act of 1933,Section 10(b) of the Securities Exchange Act of 1934 and Rule10b-5 thereunder. The Complaint seeks, among other relief,injunctions against future violations against all defendants,and disgorgement of all ill-gotten gains with prejudgmentinterest and the imposition of civil penalties againstDegenhart. The action is titled, SEC v. Paul V. Degenhart,University Club Group, Inc. and UC Properties, LLC, Civil ActionNo. 2:04-CV-23267, DSC (LR-19008).

The provisional settlement agreement addresses inclusiveeducational practices for students with disabilities and willestablish a new advisory group to the Department of Education toaddress such issues.

"We're delighted with the settlement," said Education SecretaryFrancis V. Barnes. "We think it results in a win-win situation,ending years of protracted litigation and improving educationalopportunities for some of Pennsylvania's most vulnerablestudents. We deeply appreciate the motives of the parents whoinstigated this lawsuit 10 years ago, and we appreciate theefforts made this year to bring the lawsuit to a healthy andproductive conclusion."

The Gaskin family of Carlisle and other families and advocacyorganizations filed the lawsuit on behalf of "all school-agestudents with disabilities in Pennsylvania who have been denieda free appropriate education in regular education classroomswith individualized supportive services, or have been placed inregular education classrooms without the supportive services,individualized instruction, and accommodations they need tosucceed in the regular education classroom," according to courtdocuments.

The original class-action lawsuit was filed on June 30, 1994,against the Pennsylvania Department of Education and members ofthe State Board of Education. Under the provisional settlementagreement presented to the court this week, PDE would undertakea series of steps designed to assist school districts inproviding appropriate services and supports to special educationstudents placed for all or part of the day in regular educationclassrooms. Under the provisional settlement agreement, PDEagreed to undertake a series of reforms of its systems forexercising general supervision over special education,including:

(1) The implementation of a new form of compliance monitoring - Least Restrictive Environment monitoring - a term borrowed from the federal Individuals with Disabilities Education Act to ensure that districts comply with federal and state laws protecting the rights of students with disabilities;

(3) Providing on-site training and other forms of technical assistance enabling school districts to build local capacity in inclusive educational practices; and

(4) Establishing a new advisory panel of parents, advocates and educators to review a system-wide progress in the delivery of suitable instruction to students with disabilities.

Settlement discussions between lawyers for the parties extendedover many months and were supervised for part of the time by acourt-appointed mediator.

The parties expect the court to hold a "fairness hearing," whichmay be scheduled for Spring 2005, before a judge of the U.S.District Court in Philadelphia.

For more details, contact Brian Christopher, PennsylvaniaDepartment of Education by Phone: +1-717-783-9802.

PFIZER INC.: Holy Cross-Coach's Widow To Join Suit V. Neurontin---------------------------------------------------------------Laura Allen, widow of late Holy Cross football coach Dan Allen,who was diagnosed three years ago with a mysterious neurologicaldisorder that put him in a wheelchair, suffering from headaches,nausea, dizziness and memory loss that eventually lead to hisdeath will appear as a named complainant in a proposed class-action suit against Pfizer Inc., the manufacturer of Neurontin,the Boston Herald reports.

According to Mr. Allen's widow, who describes Neurontin, as"snake oil", the drug, which is touted as an epilepsy treatmentthat is widely prescribed for everything from pain relief toinsomnia to depression, was one among other medications herhusband took when he was diagnosed.

The suit, which is expected to be filed Monday in SuffolkSuperior Court will be brought on behalf of nearly 1,000 peoplestatewide, the suit alleges that Pfizer broke the state'sconsumer-protection law. "Pfizer basically sold a sugar pill,saying it was good medicine," said Robert Bonsignore, a localconsumer activist and lawyer who will file the suit.

Pfizer spokesman Paul Fitzhenry acknowledged that the Company isthe target of a number of class-action complaints that mirrorparts of a successful whistleblower case brought by the federalgovernment.

Last May, Pfizer paid $240 million in criminal fines as part ofa $430 million settlement for illegally promoting so-called"off-label" uses for Neurontin.

However, Mr. Fitzhenry told the Boston Herald, "These suitsclosely track those allegations, but we do not believe effortsto certify (them) as class-action are supported by the law. Theyhinge on the doctor-patient relationship."

The whistleblower case was set off by a onetime medical liaisonwith Parke-Davis Inc., which was later acquired by Pfizer. Inthat case the Company was found to have urged its medicalliaisons, or salespeople, to provide doctors with misleading andeven wrong information about Neurontin. The doctors, in turn,prescribed it for a host of ailments the drug hadn't beenapproved to treat.

Dan Allen died at age 48 last May from multiple chemicalsensitivity, which is thought to have been triggered byhazardous substances used in refinishing a gymnasium floor atHoly Cross. Laura Allen, the mother of three, ages 11 to 19,sees the tragedy that befell her husband as a series of wrongsshe is now trying to put right.

She has sued the contractors who refurbished the WorcesterCollege's field house. Now Mrs. Allen is adding her name to thesuit against Pfizer. "This is the beginning of a long string ofthings that need to be investigated," she told the BostonHerald.

The complaint was targeted at Pfizer Canada et Pfizer Inc.,according to Bryan McPhadden, one of the firm's attorney's. Itsuit is specifically accusing Pfizer of negligence and claimsthe lead complainant, a woman from Mississauga, near Toronto,suffered loss of earnings because of health problems allegedlyassociated with the anti-inflammatory drug.

US regulators earlier called for the use of Pfizer's painkillingdrugs Celebrex and Bextra to be limited, urging doctors to keepin mind indications of higher heart attack and stroke risks. TheFood and Drug Administration issued a press release saying itwas "recommending limited use of Cox-2 inhibitors." Cox-2inhibitors are the latest type of non-steroid painkiller. Theonly "Cox-2 inhibitors" still on the market are Celebrex andBextra, both made by Pfizer. Vioxx, made by Merck and Co., waswithdrawn in September because of increased risk of heartattacks.

QUADRAMED CORPORATION: Ex-CFO Settles Revenue Boosting Charges--------------------------------------------------------------The Securities and Exchange Commission settled cease-and-desistproceedings against Keith M. Roberts, the former General Counseland Chief Financial Officer of Quadramed Corporation, a healthcare technology company based in Reston, Virginia (and formerlyof San Rafael, California). According to the Commission's OrderMaking Findings and Imposing a Cease-and-Desist Order Pursuantto Section 21C of the Securities Exchange Act of 1934 (Order),Roberts negotiated two $5 million roundtrip transactions with astartup company, in which Quadramed essentially paid for its ownproducts by funding the customer's purchases. The Commission'sOrder finds that Roberts caused Quadramed to recognize revenuefor the first $5 million software license even though Quadramedhad executed a guarantee for a line of credit used by thecustomer to fund the purchase, and the customer had noindependent ability to pay for the license. In the secondtransaction, Roberts caused Quadramed to wire funds that thestartup used to pay for its $5 million purchase.

The Commission found that, as a result of these transactions,Quadramed improperly inflated its revenue for the third quarterof 1998 by 10%, and inflated its revenue for the first quarterof 1999 by 9%. Quadramed also understated its net loss fromoperations by 218% and 12%, respectively, for the same quarters.

The Commission's Order finds that Roberts violated Section13(b)(5) and Rule 13b2-1 of the Securities Exchange Act of 1934(Exchange Act), and that Roberts caused Quadramed's violationsof Section 13(a) and 13(b)(2)(A) of the Exchange Act and Rules12b-20, 13a-1 and 13a-13 thereunder. The Commission ordered himto cease and desist from committing or causing any violationsand any future violations of those provisions. The Commissionaccepted an offer of settlement in which Roberts, withoutadmitting or denying the Commission's findings, agreed to theentry of the Order directing him to cease and desist fromcommitting or causing any violations and any future violationsof the periodic reporting, and books and records provisions ofthe federal securities laws.

REMEC INC.: Shareholders Launch Stock Fraud Lawsuits in S.D. CA---------------------------------------------------------------Remec, Inc. and certain of its current and former officers facethree class action lawsuits filed in the United States DistrictCourt for the Southern District of California, allegingviolations of federal securities laws.

The complaints assert, among other things, that during that timeperiod, false and misleading statements were made and materialinformation was not disclosed regarding the Company's financialcondition and performance, growth, operations, financialstatements, markets, management, earnings and present and futurebusiness prospects.

REMEDYTEMP INC.: CA Court Approves Franchisees' Suit Settlement---------------------------------------------------------------The Superior Court of the State of California, County of LosAngeles granted final approval to the settlement of the classaction filed against RemedyTemp, Inc. and:

(1) Remedy Intelligent Staffing, Inc.,

(2) Remedy Temporary Services, Inc.,

(3) Karin Somogyi,

(4) Paul W. Mikos, and

(5) Greg Palmer

On October 16, 2001, GLF Holding Company, Inc. and Fredrick S.Pallas filed a Complaint on behalf of all of the Company'sfranchisees. The Complaint alleged claims for fraud and deceit,negligent misrepresentation, negligence, breach of contract,breach of warranty, conversion, an accounting, unfair anddeceptive practices, restitution and equitable relief.

On December 3, 2002, plaintiffs filed an Amended Complaintalleging these same causes of action, but adding additionalfacts to the Complaint particularly with respect to theCompany's workers' compensation program and adding claimsregarding unfair competition on behalf of the general public inaddition to their existing class action claim. The plaintiffsclaimed that Remedy wrongfully induced its franchisees intosigning franchise agreements and took other action that causedthe franchisees damage.

The Company believed that plaintiffs' claims fell within thearbitration clause contained in the franchise agreements signedby plaintiffs. As a result, immediately after plaintiffs filedsuit, the Company filed arbitration demands against plaintiffswith the American Arbitration Association. On April 1, 2003,the Company amended its arbitration demands to add claimsagainst plaintiffs relating to workers' compensation.

The Company denied and continues to deny the allegations in theComplaint. There has been no finding of wrongdoing by theCompany. Nevertheless, to avoid costly, disruptive, and time-consuming litigation, and without admitting any wrongdoing orliability, the Company negotiated and agreed to a settlementwith plaintiffs and stipulated to the certification of asettlement class comprised of all individuals or entities thatentered into a Franchise Agreement (including renewals oramendments thereof) with RemedyTemp, Inc. and/or RemedyIntelligent Staffing, Inc. anytime prior to March 29, 2004.

On April 6, 2004, the Court preliminarily approved the parties'settlement agreement and conditionally certified the SettlementClass. All discovery and other proceedings in this action werestayed, except as may be necessary to implement the SettlementAgreement.

SOUTH KOREA: Supreme Court Sets Out Rules For Class-Action Suits----------------------------------------------------------------South Korea's Supreme Court recently laid out a set of rulesneeded for the proceeding of securities-related class actionsuits, the Korea Herald reports. The enactments of the rules,which are to be formally unveiled soon, were designed to preventthe abuse of the system, save time and cost in the filingprocedures and effectively proceed with the court's ruling,according to the country's high court.

As Korea is set to put class-action law into effect staring inJanuary, the rules laid out by the court will serve as a guidein allowing shareholders to pursue class action suits againstbusinesses with more than 2 trillion won in assets foraccounting irregularities. Companies with less than 2 trillionwon in assets will be subject to the law from 2007, the highcourt said.

As January approaches much of South Korea's business communityfears the introduction of class-action lawsuits in Korea, citingthat it might become a catalyst for an excessive number of casesfiled against companies. So fearful is the community that theyhave made petitions, including one to the National Assembly, notto retroactively apply the law to any wrongdoing committedbefore January this year, when the law was proclaimed.

Among the corporate malfeasance that would or ay warrant aclass-action lawsuit are fraud in a registration statement orprospectus, fraud in an annual, semiannual, or quarterly report,insider trading, and market manipulation.

Patterned after the U.S. system, the law will call for publicnotice of a class action, court appointment of a lead plaintiffand court approval of any settlement arising from the classaction.

However, the Korean version also imposes a minimum shareholdingrequirement on shareholders seeking to initiate the classaction. At least 50 shareholders who have a total of 0.01percent or more of the equity may bring a class-action lawsuitagainst a company.

According to the Financial Supervisory Commission, the law aimsto provide a more effective means of relief for small investors,while at the same time deterring possible violations of theSecurities Exchange Act and thus enhancing the transparency ofcorporate governance.

Under the current legal system, if small investors sufferlosses, it is difficult to institute an action for damage.Moreover, there has been concern about the possibility ofseveral investors initiating lawsuits related to the samecompany action, resulting in an inefficient use of the courtsystem.

UTi WORLDWIDE: Named As Defendant in TX Gulf War Chemicals Suit---------------------------------------------------------------UTi Worldwide, Inc. is one of approximately 83 defendants namedin two class action lawsuits originally filed on September 19,1995 and subsequently consolidated in the District Court ofBrazaria County, Texas (23rd Judicial District).

The suits alleged that various defendants sold chemicals thatwere utilized in the 1991 Gulf War by the Iraqi army whichcaused personal injuries to U.S. armed services personnel andtheir families, including birth defects. The lawsuits werebrought on behalf of the military personnel who served in the1991 Gulf War and their families and the plaintiffs are seekingin excess of $1 billion in damages. To date, the plaintiffshave not obtained class certification.

The Company believes it is a defendant in the suit because anentity that sold the Company assets in 1993 is a defendant. TheCompany believes it will prevail in this matter because thealleged actions giving rise to the claims occurred prior to theCompany's purchase of the assets, the Company said in adisclosure to the Securities and Exchange Commission. TheCompany further believes that it will ultimately prevail in thismatter since it never manufactured chemicals and the plaintiffshave been unable to thus far produce evidence that the Companyacted as a freight forwarder for cargo that included chemicalsused by the Iraqi army.

WALONG MARKETING: Recalls Lily Flower Due To Undeclared Sulfites----------------------------------------------------------------Walong Marketing, Inc. of Buena Park, CA is recalling "AsianTaste" brand Dried Lily Flower because the product may containundeclared sulfites. People who have an allergy or severesensitivity to sulfites run the risk of serious or lifethreatening allergic reaction if they consume this product.

The recalled Asian Taste Dried Lily Flower was sold in clear,uncoded, 6 oz. plastic package and is the product of China. Theproduct was sold to the retail stores throughout the UnitedStates.

The recall was initiated after routine sampling by FloridaDepartment of Agriculture and Consumer Service Division of FoodSafety revealed the presence of undeclared sulfites in AsianTaste brand Dried Lily flower in packages, which did not declaresulfites on the label. The consumption of 10 milligrams ofsulfites per serving has been reported to elicit severe reactionin asthmatics. Anaphylactic shock could occur in certainsulfites sensitive individuals upon ingesting 10 milligrams ormore of sulfites. No illnesses have been reported to date inconnection with this problem.

Consumers who have purchased Asian Taste Dried Lily Flowershould return it to the place of purchase. Retailers who havethis product should pull the product from store shelves untilprovided further instructions by Walong Marketing, Inc.Consumers and retailers with questions may contact the companyat 714-670-8899.

WEST HONEST: Recalls Lily Flowers Due To Undeclared Sulfites------------------------------------------------------------ West Honest International Inc. of City of Industry, CA, isrecalling all 5 ounce and 6 ounce packages of "Dried LilyFlower" because they may contain undeclared sulfites. People whohave allergies to sulfites run the risk of serious or life-threatening allergic reaction if they consume these products.

The recalled "Dried Lily Flower" was distributed throughout theUnited States. The recall was initiated after the presence ofundeclared sulfites in Dried Lily Flower was discovered inpackages, which did not declare sulfites on the labels. Theconsumption of 10 milligrams of sulfites per serving has beenreported to elicit severe reactions in some asthmatics.Anaphylactic shock could occur in certain sulfite sensitiveindividuals upon ingesting 10 milligrams or more of sulfites.

Consumers who have purchased 5 ounce and 6 ounce packages of"TIANDU Dried Lily Flower", "WeiChuan Dried Lily Flower", ROXYDried Lily Flower" and "Asian Taste Dried Lily Flower" are urgedto return packages to the place of purchase for a full refund.Consumers with questions may contact the company at 626-961-9813.

New Securities Fraud Cases

ASPEN TECHNOLOGY: Lasky & Rifkind Lodges Securities Suit in MA--------------------------------------------------------------The law firm Lasky & Rifkind, Ltd., reminds investors that thedeadline for purchasers of Aspen Technology, Inc. ("Aspen" orthe "Company") (NASDAQ:AZPNE) to move for lead plaintiff in thissecurities fraud class action is rapidly approaching. Thelawsuit was filed against Aspen, Lawrence B. Evans, Lisa W.Zappala, David L. McQuillin and Charles F. Kane ("Defendants").If you purchased or otherwise acquired publicly tradedsecurities of Aspen between January 25, 2000 and October 29,2004, inclusive, (the "Class Period") and wish to be a leadplaintiff in the case you must move to serve as a lead plaintiffby filing a motion in the United States District Court for theDistrict of Massachusetts no later than January 10, 2005.

The complaint alleges that Defendants violated Sections 10(b)and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5promulgated thereunder. Specifically, the complaint alleges thatDefendants issued a series of materially false and misleadingstatements during the Class Period regarding the Company'sfinancial performance. More specifically, Defendants failed todisclose that Aspen had improperly recognized revenue forcertain software license and service agreement transactionsentered into with certain alliance partners during the period2000-2002, and that as a result the Company's revenues andearnings were materially overstated.

On October 27, 2004, Aspen announced that its Audit Committeehad begun a review of accounting for certain software licenseand service agreement transactions. According to the Company,the review could lead to a restatement. Then on October 29,2004, Aspen announced that federal prosecutors launched a probeinto the Company's accounting practices from 2000 through 2002.The Company also received a subpoena from the U.S. Attorney'sOffice for the Southern District of New York requestingdocuments related to the transactions the Company entered intoin those years.

For more details, contact the law firm of Lasky & Rifkind byPhone: (800) 495-1868.

CHARLOTTE RUSSE: Lerach Coughlin Lodges Securities Suit in CA-------------------------------------------------------------The law firm of Lerach Coughlin Stoia Geller Rudman & RobbinsLLP ("Lerach Coughlin") initiated a class action in the UnitedStates District Court for the Southern District of California onbehalf of purchasers of Charlotte Russe Holding Inc. ("CharlotteRusse") (NASDAQ:CHIC) publicly traded securities during theperiod between October 23, 2003 and December 6, 2004 (the "ClassPeriod").

The complaint charges Charlotte Russe and certain of itsofficers and directors with violations of the SecuritiesExchange Act of 1934. Charlotte Russe is a rapidly growing mall-based specialty retailer of fashionable, value-priced appareland accessories targeting young women between the ages of 15 and35. Charlotte Russe operates two retailing concepts: CharlotteRusse, which comprises 80% of the Company's business, andRampage, which comprises 20% of the Company's business.

The complaint alleges that during the Class Period, defendantscaused Charlotte Russe's shares to trade at artificiallyinflated levels through the issuance of false and misleadingstatements about the Company's turnaround initiatives. The truefacts, which were known by each of the defendants but concealedfrom the investing public during the Class Period, were asfollows:

(1) the Company's merchandise was receiving very poor acceptance by consumers in favor of the Company's competitors;

(2) the Company's attempted "turnaround" of its Rampage stores was a disaster;

(3) the Company's inventory was grossly overvalued and its new product line had received disastrous reviews which defendants knew would result in declining margins and revenues in current and future quarters;

(4) the Company's top creative personnel and merchants had fled the Company, leaving the Company in a state of decay;

(5) the Company's turnaround initiatives, including its repositioning of Rampage, proved to be a disaster;

(6) any positive effects from its initiatives would take a longer time to impact the Company's operations;

(7) the Company did not anticipate comparable same store sales increases for Q4, but rather, expected a decline in comparable same store sales;

(8) Rampage, which comprised only 20% of the Company, had been performing so poorly that this factor alone would negatively impact Charlotte Russe's Q4 earnings by $0.14; and

(9) as a result, the Company's earnings guidance for Q4 2004 of $0.28 to $0.32 per share was grossly overstated; in fact, the Company would ultimately adjust its forecast drastically downward to $0.11 to $0.13 per share.

On December 6, 2004, after the markets closed, Charlotte Russeannounced another executive departure and a dramatic reductionin Q1 2005 earnings forecasts. On this news, Charlotte Russe'sstock collapsed to as low as $8.84 per share.

PFIZER INC.: Lerach Coughlin Lodges Securities Fraud Suit in NY---------------------------------------------------------------The law firm of Lerach Coughlin Stoia Geller Rudman & RobbinsLLP ("Lerach Coughlin") initiated a class action in the UnitedStates District Court for the Southern District of New York onbehalf of purchasers of Pfizer Inc. ("Pfizer") (NYSE:PFE)publicly traded securities during the period between October 31,2000 and December 16, 2004 (the "Class Period").

The complaint charges Pfizer and certain of its officers anddirectors with violations of the Securities Exchange Act of1934. Pfizer is a research-based, global pharmaceutical companythat discovers, develops, manufactures and markets prescriptionmedicines for humans and animals, as well as consumer healthcareproducts.

The complaint alleges that during the Class Period, defendantsissued false and misleading statements and omissions regardingthe safety and marketability of Pfizer's Celebrex and BextraCOX-2 inhibitor products. Throughout the Class Period,defendants were made aware of strong indicators that Pfizer'sCOX-2 inhibitor drugs posed serious undisclosed health risks topatients who were prescribed the drugs. As a result of thedefendants' false statements, Pfizer's stock traded at inflatedlevels during the Class Period.

The true facts, which were known by each of the defendants butconcealed from the investing public during the Class Period,were as follows:

(1) that although the information does not appear in the U.S. package insert and prescribing information, Celebrex increases the potential for causing adverse cardiovascular events, since it is a selective COX-2 inhibitor capable of creating a metabolic imbalance between prothrombic cyclo-oxygenase-1 (COX-1) and antithrombotic cyclo-oxygenase-2 (COX-2) metabolism;

(2) that prior clinical studies, including the CLASS study where concurrent low-dose aspirin therapy, ibuprofen or diclofenac controls were employed, were flawed and defective, since non-steroidal anti-inflammatory drug ("NSAID") use also impacts the metabolic balance between COX-1 and COX-2 metabolism, potentially lowering the observed number of cardiovascular events in those studies;

(3) that even as defendants promoted Celebrex to physicians, patients and investors on the basis of its safety and efficacy, health authorities continued to receive alarming reports of observed cardiovascular and cerebrovascular adverse reactions in patients not predisposed to cardiovascular disease;

(4) that even as defendants heralded the safety of Celebrex following the recall of Vioxx, another anti-arthritic drug marketed by Merck, defendants knew that, unlike the scientifically valid clinical studies triggering the Vioxx recall, previous clinical trials pointing to the cardiovascular safety of Celebrex, including the CLASS study, were so flawed and defective that additional clinical studies looking at cardiovascular safety were required; and

(5) that even as defendants intensified their retail advertising campaign and public statements following the Vioxx recall, including publishing full-page advertisements in major newspapers heralding the safe use of the drug, overwhelming and indisputable data and results pointed to a class-specific cardiovascular health risk for COX-2 inhibitors, including the adverse cardiovascular safety data defendants had already generated for Bextra, the Company's other selective COX-2 inhibitor drug, and nearly completed specific safety studies of Celebrex that would demonstrate that Celebrex suffered from the class-specific cardiovascular risks attributable to COX-2 inhibitors.

On December 17, 2004, Pfizer announced it had "received newinformation ... about the cardiovascular safety of its COX-2inhibitor Celebrex (celecoxib) based on an analysis of two long-term cancer trials." On this news, Pfizer shares fell to as lowas $22 per share.

For more details, contact William Lerach or Darren Robbins ofLerach Coughlin by Phone: 800/449-4900 or 619/231-1058 by E-mail: wsl@lerachlaw.com or visit their Web site:http://www.lerachlaw.com/cases/pfizer/.

PFIZER INC.: Marc S. Henzel Lodges Securities Fraud Suit in NY--------------------------------------------------------------The law offices of Marc S. Henzel initiated a class actionlawsuit in the United States District Court for the SouthernDistrict of New York, on behalf of all persons who purchased thecommon stock of Pfizer, Inc. (NYSE: PFE) between November 1,2000 and December 16, 2004, inclusive, (the "Class Period")against defendants Pfizer and certain officers and directors ofthe Company.

The complaint arises out of defendants' false and misleadingstatements and omissions concerning the safety and marketabilityof Pfizer's Celebrex and Bextra products. At all times duringthe Class Period, defendants were aware that Celebrex andBextra, drugs known as "Cox-2 inhibitors," posed seriousundisclosed health risks to consumers. Defendants knew orrecklessly disregarded that the undisclosed health risks posedby these drugs would limit their marketability, and thatpotential financial liability Pfizer faced from the harms thesedrugs caused posed a serious threat to the Company's financialcondition. Nonetheless, defendants concealed these facts fromthe investing public, thereby damaging Plaintiff and the Class.

Toward the close of the Class Period, a series of factualrevelations from several sources caused the market to graduallyperceive the truth about Pfizer's Bextra and Celebrex products.On December 17, 2004, Pfizer issued a press release announcingthe Company has discovered an increased risk of heart problemswith patients taking its painkiller Celebrex. The press releasecame after a study revealed that the use of Celebrex in patientstaking 400mg to 800mg of the drug daily were found to have arisk of 2.5 times greater of experiencing major heart problemsthan those who were not. This level of risk was even greaterthan the one found in patients taking Vioxx that led Merck towithdraw Vioxx from the marketplace.

For more details, contact the law offices of Marc S. Henzel byMail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail:mhenzel182@aol.com.

VIMPEL-COMMUNICATIONS: Marc S. Henzel Lodges NY Securities Suit---------------------------------------------------------------The law offices of Marc S. Henzel initiated a class actionlawsuit in the United States District Court for the SouthernDistrict of New York, on behalf of all persons who purchased orotherwise acquired the securities of Open Joint Stock Company"Vimpel-Communications"(NYSE: VIP) between March 25, 2004 andDecember 7, 2004, inclusive (the "Class Period"), seeking topursue remedies under the Securities Exchange Act of 1934 (the"Exchange Act").

The action is pending in the United States District Court forthe Southern District of New York against defendants VimpelCom,Alexander V. Izosimov (CEO) and Elena A. Shmatova (CFO).According to the complaint, defendants violated sections 10(b)and 20(a) of the Exchange Act, and Rule 10b-5, by issuing aseries of material misrepresentations to the market during theClass Period.

VimpelCom is an Open Joint Stock Company organized under thelaws of the Russian Federation that maintains principalexecutive offices in Moscow. The primary trading market for itssecurities is the New York Stock Exchange where its shares tradeas American Depositary Receipts ("ADR"s), with each ADRrepresenting one quarter of a share of VimpelCom common stock.The Company provides wireless telecommunications services underthe Bee Line and EXCESS brands. Most of the Company's operatingincome is generated by its wholly-owned subsidiary, KBI Impulse("KBI").

The complaint alleges that at all relevant times the Company'sfinancial statements were materially false and misleadingbecause defendants failed to report millions of dollars ofcontingent tax liability arising from intra-company transfersbetween VimpelCom and KBI, despite defendants' knowledge orreckless disregard of the Company's tax exposure. The truth wasrevealed on December 8, 2004, when defendants disclosed that theCompany had received "an act with preliminary conclusions"stating that the Company owes approximately $90 million inunpaid tax and $67 million in fines and penalties. On thisannouncement, the Company's ADR price dropped 32%, from anopening price of $40.30 on December 7, 2004 to a closing priceof $27.10 on December 8, 2004 on extremely heavy trading volume.

For more details, contact the law offices of Marc S. Henzel byMail: 273 Montgomery Ave., Suite 202, Bala Cynwyd, PA 19004 610-660-8000 or 888-643-6735 by Fax: 610-660-8080 or by E-Mail:mhenzel182@aol.com.

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